As the world economy, markets and social interactions continue to become more and more digitized, an increasing amount of people are also realizing that domain names are digital real estate and the best ones are appreciating assets. First of all, it is important to define what a premium domain name is. In general we’re talking about one word domains mainly .com but also top words in .net, .org, .co, .io and some other ccTLDs as well as short two, three (in some cases) four letter and number .coms. Two word product, keyword and also catchy brandable .coms are also valuable digital properties. Premium domains are highly sought after and usually receive multiple offers or inquiries annually.
Why do we think premium domains will continue to appreciate?
1) More people, business and activities moving online
As the possibility of a widespread health issue looms, it’s likely that all markets will feel the effect. The domain industry is in a unique position here. With the mass cancellation of live events, conferences and social gatherings, this will drive even more people to the Internet for various reasons at a faster pace. Domain names are ultimately the foundation which each and every business online is or will be built upon. There is no denying the fact that utilizing a premium domain name is key element to proper branding and success online as demonstrated by the largest and most successful companies in the world.
2) The pool of investors that are acquiring domain names to hold or resell is growing every day
Aside from pure domain name investors, we're coming across more and more entrepreneurs and corporations that are buying and holding domain names long term for possible future projects or brands. Not only are there more investors in the market today but by looking at the trajectory of price/sales data from wholesale marketplaces and domain auction venues such as Godaddy auctions and dropcatch.com, you’ll quickly see that investors are paying more than ever to acquire the domains that meet their investing criteria. If savvy domain investors are spending more to acquire premium domains, this will lead to increased prices when appropriate and motivated end-users come knocking to acquire names that they need.
The amount of truly premium domain names (or those that have premium potential from emerging tech, news, etc) is finite. Even with the rollout of the new gTLD‘s by and large .com is the preferred extension worldwide. The number of domain names total registered to date is closing in on 400 million and of those, only a small percentage will ever be worth more than their registration price in liquid value. Most of the premium domains that are in demand have been registered for a long time and people that own them know they have something of value as they receive a lot of unsolicited interest/offers. Also, many of the best domains have already been acquired by businesses that will likely never put them back on the market, so the supply of truly valuable domains is diminishing daily.
With these points being made, it is important to understand we are entering a time of economic uncertainty. In the short term, perhaps over the next 3-6 months, it seems there will definitely be some disruption and potentially opportunities to acquire premium domains at great prices for those who have cash ready to deploy. Now could be an optimal time to build or grow a domain name portfolio. However, in the long run we're confident that demand for premium domains will continue to grow, increasing the value of domain assets as well.